Rapamycin is a macrolide natural product with multiple clinical applications. Rapamycin serves as an immunosuppressant following organ transplantation, as chemotherapy for tumors and as an inhibitor of restenosis of arteries. Yet, the mechanism of action of rapamycin as an antiproliferative agent remains incompletely understood and resistance to its effects undermines the clinical applications. Rapamycin binds to a ubiquitous intracellular receptor protein called FKBP12 and inhibits the protein kinase Target Of Rapamycin (TOR), a member of the family of cell cycle checkpoint kinases. TOR is conserved among all eucaryotes and functions in control cell growth and cell proliferation. Yeast genetics has revealed that signaling downstream of TOR requires the essential protein Ser/Thr phosphatase SIT4 (mammalian PP6), which controls induction of G1 cyclins and cell cycle progression. In addition, the essential yeast protein TAP42 and recently found TIP41 regulate the SIT4 phosphatase and possibly also the PP2A phosphatase in yeast. This revised continuation application proposes four Specific Aims: 1) Elucidate the mechanism for rapamycin and TOR regulation of protein phosphatases PP6 and PP2A involving phosphorylation and/or subunit interchange. 2) Define the structural determinants required for interaction between human alpha-4 (TAP42) and its binding partner AlP (TIP41) using transient expression of truncated and mutated proteins and co-precipitation. 3) Determine the function of the unique N terminus of PP6 (SIT4) that confers the ability of this phosphatase to promote G1 to S phase progression by producing fusion proteins and chimeric phosphatases to test for specific localization, dominant negative interference or change in catalytic properties. 4) Establish that cellular resistance to rapamycin depends on availability of alpha-4 to associate with PP6 (SIT4) phosphatase by increasing and depleting cellular levels of AlP and alpha-4 using transfection and siRNA knock-down. The proposed studies will give new insights into an under-studied phosphatase-signaling pathway and provide information on the molecular basis for action of and resistance to rapamycin.